<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                (AMENDMENT NO. 2)



(Mark One)

(x)      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

         For the quarterly period ended June 30, 2001
                                        -------------

( )      Transition report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934
         For the quarterly period from ________ to ________

                        Commission file number 000-19579

                            INTERACTIVE NETWORK, INC.
             (Exact name of registrant as specified in its charter)


       California                                        94-3025019
(State of incorporation)                 (I.R.S. employer identification number)

                           180 Second Street, Suite B
                           Los Altos, California 94022
              (Address of principal executive offices and zip code)

                                 (650) 947-3345
              (Registrant's telephone number, including area code)


                        with a copy to Robert S. Townsend
                            Morrison & Foerster, LLP
                                425 Market Street
                             San Francisco, CA 94105
                                 (415) 268-7000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [ ]


Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Class                                  Shares outstanding as of January 4, 2002
-----                                  -----------------------------------------
Common Stock                                           43,019,277


<PAGE>

                            INTERACTIVE NETWORK, INC.

                                      INDEX



PART I.  FINANCIAL INFORMATION                                              Page
                                                                            ----

   ITEM 1.  FINANCIAL STATEMENTS..............................................1

            CONSOLIDATED BALANCE SHEETS AS OF
             JUNE 30, 2001 (Unaudited) AND DECEMBER 31, 2000..................1

            CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
              FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000.......2

            CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
              FOR THE SIX MONTHS ENDED JUNE 30, 2001
              AND 2000........................................................3

            NOTES TO FINANCIAL STATEMENTS (Unaudited).........................4

   SIGNATURES.................................................................6




                                EXPLANATORY NOTE



This Amendment No. 2 on Form 10-Q/A to the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2001 is being filed to amend Item 1 of Part I to
read as follows. No other changes are being made to the Form 10-Q.


<PAGE>

                                     PART I.

                              FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS.

INTERACTIVE NETWORK, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                               JUNE 30, 2001  DECEMBER 31, 2000
                                                              --------------   --------------
                                                               (Unaudited)
<S>                                                           <C>              <C>
ASSETS
Current assets:
    Restricted cash                                           $   5,543,978    $   5,609,735
    Cash                                                            948,999          685,168
    Royalty fee receivable                                          135,000          250,000
    Prepaid expenses and other current assets                        46,523           47,218
                                                              --------------   --------------

          Total current assets                                    6,674,500        6,592,121

Deposits and other assets                                             3,144            3,220

                                                              --------------   --------------
          Total assets                                        $   6,677,644    $   6,595,341
                                                              ==============   ==============

LIABILITIES AND SHAREHOLDERS' (DEFICIT)

Current liabilities:
    Accounts payable and accrued liabilities                  $     791,103    $     443,952
    Liabilities subject to compromise                             5,504,922        5,503,263
    Promissory note - current                                             -           85,565
    Deferred legal fees                                                   -          957,775
                                                              --------------   --------------
          Total current liabilities                               6,296,025        6,990,555


Promissory note - noncurrent                                      1,246,130          598,955
Convertible Promissory Notes                                      1,120,616                -

Shareholders' deficit:
    Preferred stock, no par value, 10,000,000 shares
       authorized; no shares issued and outstanding as of
       June 30, 2001 and December 31, 2000                                -                -

    Common stock, no par value, 150,000,000 shares
       authorized; 43,019,277 shares issued and outstanding
       as of both June 30, 2001 and December 31, 2000           145,874,986      145,874,986

    Accumulated deficit                                        (147,860,113)    (146,869,155)
                                                              --------------   --------------

          Total shareholders' (deficit)                          (1,985,127)        (994,169)
                                                              --------------   --------------

          Total liabilities and shareholders' (deficit)       $   6,677,644    $   6,595,341
                                                              ==============   ==============



See accompanying notes to consolidated financial statements.
</TABLE>

                                       1
<PAGE>
<TABLE>

INTERACTIVE NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<CAPTION>

                                                          THREE MONTHS                  SIX MONTHS
                                                          ENDED JUNE 30,              ENDED JUNE 30,
                                                  ---------------------------   ---------------------------
                                                      2001           2000           2001           2000
                                                  ------------   ------------   ------------   ------------

<S>                                               <C>            <C>            <C>            <C>
Royalty fees                                      $    67,500    $         -    $   135,000    $         -
                                                  ------------   ------------   ------------   ------------

General and administrative expenses:
    Salaries                                           69,417         65,641        147,336        131,282
    Employer payroll taxes                              9,004          8,689         22,726         17,331
    Contract labor                                      7,012         11,858         32,520         28,606
    Rent                                                9,000          3,099         18,000          5,165
    Directors' & Officers' insurance                   16,801              -         32,702              -
    Other administrative costs                          9,796         22,444         16,994         53,065

       Legal fees                                      91,341        117,969        139,450        170,977
       Accounting fees                                 26,060         17,054         47,156         54,372
       Advisory fees                                        -              -              -        390,000
       Legal - NTN litigation                          23,549         10,135         25,936         14,904
       Shareholder relations - proxy                        -         24,776          1,400         28,659
                                                  ------------   ------------   ------------   ------------
General and administrative expenses                   261,980        281,665        484,220        894,361
                                                  ------------   ------------   ------------   ------------

          Loss from operations                       (194,480)      (281,665)      (349,220)      (894,361)

Other (income) and expense
    Interest (income)                                 (72,352)       (99,196)      (145,428)      (199,849)
    Interest expense                                  148,409         89,000        286,374        195,000
    Net loss from investment in affiliate
       accounted for by the equity method             314,486        273,160        619,345        278,651
    Reserve for impairment of investment             (164,486)             -       (219,345)             -
    Litigation settlement                                   -      3,301,000              -      3,081,785
                                                  ------------   ------------   ------------   ------------

          Other (income) and expense, net             226,057      3,563,964        540,946      3,355,587
                                                  ------------   ------------   ------------   ------------

          Loss before reorganization expenses        (420,537)    (3,845,629)      (890,166)    (4,249,948)

Reorganization expenses                               100,792            250        100,792        106,522
                                                  ------------   ------------   ------------   ------------

          Net loss before federal & state taxes      (521,329)    (3,845,879)      (990,958)    (4,356,470)

             Federal & state taxes                          -              -              -            800
                                                  ------------   ------------   ------------   ------------
          Net loss                                $  (521,329)   $(3,845,879)   $  (990,958)   $(4,357,270)
                                                  ============   ============   ============   ============

Basic and diluted loss per share                  $     (0.01)   $     (0.10)   $     (0.02)   $     (0.11)
Shares used in basic and diluted net
  loss per share                                   43,019,277     39,427,605     43,019,277     39,217,000

See accompanying notes to consolidated financial statements.

                                       2
</TABLE>

<PAGE>

INTERACTIVE NETWORK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    SIX MONTHS
                                                                                  ENDED JUNE 30,
                                                                           ---------------------------
                                                                               2001           2000
                                                                           ------------   ------------
<S>                                                                        <C>            <C>
Cash flows from operating activities:
    Net loss                                                               $  (990,958)   $(4,357,270)
    Adjustments to reconcile net loss to net cash provided by (used for)
       operating activities:
          Loss from investment in affiliate                                    619,345        278,651
          Allowance for investment in affiliate                               (219,345)             -
          Changes in assets and liabilities:
             Royalty fee receivable                                            115,000              -
             Prepaid expenses and other assets                                     771        (22,781)
             Accounts payable                                                  381,975        (71,055)
             Liabilities subject to compromise                                   1,659      2,331,397
             Deferred legal fees                                              (500,000)             -
             Other accrued liabilities                                          69,626        350,000
                                                                           ------------   ------------
                Cash provided by (used in) operating activities:              (521,927)    (1,491,058)

Cash flows from investing activities:
    Investment in TWIN Entertainment                                                 -       (500,000)
    Promissory note receivable from TWIN Entertainment                        (400,000)             -
                                                                           ------------   ------------
                Cash provided by (used in) financing activities:              (400,000)      (500,000)
                                                                           ------------   ------------

Cash flows from financing activities:
    Proceeds from bridge financing                                           1,120,000              -
    Sale of common stock                                                             -        350,997
                                                                           ------------   ------------
                Cash provided by (used in) financing activities:             1,120,000        350,997
                                                                           ------------   ------------

Net increase (decrease) in cash                                            $   198,073    $(1,640,061)

Cash:
    Beginning of period                                                      6,294,903      7,576,158
                                                                           ------------   ------------
    End of period                                                          $ 6,492,977    $ 5,936,097
                                                                           ------------   ------------



See accompanying notes to consolidated financial statement.
</TABLE>

                                       3
<PAGE>


                            INTERACTIVE NETWORK, INC.

              Notes to Unaudited Consolidated Financial Statements

                                  June 30, 2001

The consolidated financial information of Interactive Network, Inc. (the
"Company") furnished herein reflects all adjustments, consisting only of normal
recurring adjustments which in the opinion of management are necessary to
present fairly the financial position of the Company as of June 30, 2001 and the
results of its operations and cash flows for the periods presented. This
Quarterly Report on Form 10-Q should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-K Report for the
year ended December 31, 2000 filed with the Securities and Exchange Commission
("SEC") on April 16, 2001. The results of operations for the three-month or
six-month periods ended June 30, 2001 are not necessarily indicative of the
results for any subsequent quarter or for the entire year ending December 31,
2001.

Current liabilities consist of accounts payable, and legal fees and expenses
incurred in connection with the Company's Chapter 11 bankruptcy proceedings and
general corporate work. Payment of Morrison & Foerster's pre-confirmation fees,
which was subject to Bankruptcy Court approval, was deferred by agreement until
April 22, 2000, when payment was due in full without interest. As the Company
lacked funds to pay Morrison & Foerster's fees at that time, Morrison & Foerster
did not apply to the Bankruptcy Court for approval of its fees.

Long-term debt at June 30, 2001 and December 31, 2000, was as follows:

                                          June 30,         December 31,
                                            2001               2000
-------------------------------------------------------------------------
Promissory note - prime + 1%             $1,246,130          $684,520
Convertible notes - 10%                   1,120,616                 -
-------------------------------------------------------------------------
Less current portion                              -            85,565
-------------------------------------------------------------------------
Total long-term debt                     $2,366,746          $598,955
-------------------------------------------------------------------------


On June 30, 2001, with approval from the Bankruptcy Court, the Company paid
Morrison & Foerster $500,000 as partial payment of the principal and interest on
the pre-confirmation fees. The remaining pre-confirmation fees are subject to an
agreement between Morrison & Foerster and the Company, with the first payment
due on October 15, 2002. The note accrues interest at 1% per annum over the Bank
of America prime rate.

In the second quarter of 2001, the Company raised $1.12 million through the sale
of 112 units to private investors pursuant to 10% Convertible Promissory Notes
and Common Stock Purchase Warrants. Each unit consists of (i) a $10,000
convertible promissory note bearing interest at 10% per annum that is
convertible into its common stock at the rate of $.50 per share, and (ii) a
five-year warrant to purchase 20,000 shares at an exercise price of $.60 per
share. An additional $505,000 (50.5 units) was raised in the third quarter under
the same terms.

The issuance of convertible debt securities by the Company with a detachable
conversion feature did not create a "beneficial conversion feature" because the
conversion price ($.60) was not "in-the-money at the commitment date." As
described in EITF 98-5, the debt was therefore accounted for in accordance with
APB Opinion 14, Accounting for Convertible Debt and Debt Issued with Stock
Purchase Warrants, Paragraph 16. The Company determined that the portion of the
proceeds from the issuance allocable to the warrants is de minimus, and
therefore the entire proceeds were treated as debt.

                                       4
<PAGE>

INVESTMENT IN AFFILIATE. The Company owns 50% of the outstanding capital stock
of TWIN Entertainment, Inc. ("TWIN Entertainment"), a corporate joint venture
between the Company and Two Way TV Limited ("Two Way TV"). TWIN Entertainment's
offices are located at 300 De Haro Street, Suite 342, San Francisco, CA 94103.
TWIN Entertainment operates in the United States and Canada using technology
licensed to it by the Company and Two Way TV. In addition to its initial
investment of $500,000, the Company made additional investments in TWIN
Entertainment in the form of multiple loans totaling $1.25 million through the
first quarter of 2001. The Company made further loans of $50,000 in May 2001 and
$100,000 in June 2001 and, after the quarter ended June 30, 2001, made
additional loans of $100,000 in July 2001 and $100,000 in August 2001. Two Way
TV made similar loans to TWIN Entertainment, leaving the relative ownership
interests in TWIN Entertainment unchanged. Each party reserves the right to
convert such amounts to equity in TWIN Entertainment in the future under terms
to be determined and agreed upon at a later date by the parties.

Condensed financial data of TWIN Entertainment for the three and six month
periods ended June 30, 2001 follows:
<TABLE>
<CAPTION>

                                                                                           FROM INCEPTION AT
                                                                                           JANUARY 10, 2000
                                                  THREE MONTHS ENDED    SIX MONTHS ENDED       THROUGH
                                                    JUNE 30, 2001        JUNE 30, 2001       JUNE 30, 2001
SUMMARY OF OPERATIONS
<S>                                                <C>                  <C>                 <C>
Revenues                                           $           0        $           0       $           0
Costs and expenses                                     1,456,452            1,456,452           3,642,901
Income taxes                                               1,800                1,800               2,600
Net loss                                             (1,458,252)           (1,458,252)         (3,645,501)
Interactive Network's equity in net income             (729,126)             (729,126)         (1,822,751)

BALANCE SHEET DATA ASSETS
Current assets                                                                 60,247
Non-current assets                                                            351,115
                                                                        --------------
     Total assets                                                       $     411,362


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities                                                           326,863
Long-term debt                                                              2,800,000
Other non-current liabilities
Shareholders' deficit                                                       (2,715,501)
                                                                        ---------------
     Total liabilities and shareholders'                                $      411,362
     deficit
</TABLE>

The Company periodically evaluates the recoverability of its equity investments,
in accordance with APB No. 18, "The Equity Method of Accounting for Investments
in Common Stock," and if circumstances arise where a loss in value is considered
to be other than temporary, the Company will record a write-down of investment
cost. The Company's recoverability analysis is based on the projected
undiscounted cash flows of the operating ventures, which is the lowest level of
cash flow information available. The Company's share of the operating loss from
its joint venture investment in TWIN Entertainment was approximately $314,000
for the quarter ended June 30, 2001 accounted for by the equity method. The
Company also adjusted its allowance against its investment and outstanding loans
in the amount of $164,486 to write the investment, including loans, down to zero
at June 30, 2001, as no assurance can be made that the joint venture will be
profitable in the future.



                                       5
<PAGE>


SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

Date: January 9, 2002

                              INTERACTIVE NETWORK, INC.
                              (Registrant)

                              By: /s/ Bruce W. Bauer
                                  ----------------------------------------------
                                  Bruce W. Bauer
                                  Chairman of the Board
                                  President, Chief Executive Officer (principal
                                  executive officer) and Chief Financial
                                  Officer (principal financial officer)








                                       6